Month: September 2015

How often does this happen to you? You write down your goals, vow to review them daily, and after a few months, you find the list at the bottom of your nightstand. This had become an embarrassingly common pattern for me. It didn’t matter if my goals were smart. They had no oomph. There was no fire under my ass.

In 2014, I became interested in loss aversion. The basic concept goes like this: psychologically, a loss affects you twice as much as a gain. This annual experiment by Harvard Professor Max Bazerman shows how this works:

Every year, in negotiation classes, Max Bazerman would auction off a $20 bill to his students. The rules were as follows: the winner would pay the winning bid and “win” the $20 bill. The loser would pay the losing bid and not get anything in return.

While many students would join in on the bidding, most would drop out by $16 or $17. There were always a couple students who would continue to bid, afraid to lose too much cash. The bidding often went far beyond $20, with both students trying to recoup some of their losses.

After starting 2014 with big commitments and accomplishing almost nothing for the first few weeks, an idea clicked. I had to become a gambling man. I was going to put money on my goals.

Put Your Money Where Your Mouth Is

I decided to work out three times a week for six months. Here’s the bet I made:

For every workout I miss, I will pay out $25 to a friend. I put a cap of $250 on it, at which point I would consider myself a complete failure.

Now here’s the thing: I’m a frugal guy. I can stretch $25 a long way. To lose that money, just because I’m too lazy to work out for 45-60 minutes, would be heartbreaking.

My plan was set into motion of January 22, 2014. I missed my first workout on April 17, 2014. I went on to complete my goal without losing any more money. The plan worked.

Four Websites That Can Help You

While I was betting my friends, I was unaware that there were other sites and apps which take your money if you give up. These methods are worth a shot if you’re struggling with your goals:

Stickk – Founded by Yale academics, Stickk requires that you pledge money towards your commitment. You then find a referee (who reviews your reports) and get friends involved, presumably to act as cheerleaders or heckle you into continuing. Whatever you lose with StickK goes to charity. To make things interesting, some of the charities are controversial and will make you feel worse about losing your hard-earned cash.

Beeminder – Marketed as a goal tracker with teeth, Beeminder keeps you on track with daily reminders (including data entry just by responding to an e-mail), graphs showing your progress, and, of course, cash pledges. Your first goal is free but if you get “derailed,” you have to pledge $5. Derail again and the pledge goes up.

Pact – This health and fitness app is a little more enticing than the previous two. You still put up money, but once a week, you earn cash rewards paid by the members who didn’t accomplish their goals. If you struggle with health-related goals, this powerful reward/loss system is worth looking into.

21 Habit – This site works a little differently than the previous three. Here you put up $21 and earn it back over the next 21 days. For every day you’re successful, you “earn” $1. For every day you blow it, $1 is forfeited. You’ll receive a daily e-mail where you either click Success or Fail.

The caveat with all these systems (including my own) is that you should be honest. The point is for it to be painful. Chickening out the moment you’re going to lose money defeats the purpose. Either commit 100% or don’t bother.

Invest in Yourself

If you’re still on the fence about putting up cash, think of it this way: what is that result worth to you? For example, eating lots of vegetables is a big deal to me. Veggies make me feel healthy and give me a better chance at living a long life. I’m willing to pay for that result.

Prior to betting my friends, I was paying the admission to an early grave. $10 for a greasy lunch here, $20 for a case of beer there… I couldn’t do a normal workout without almost throwing up.

As master investor Warren Buffett says, “Invest in as much of yourself as you can, you are your own biggest asset by far.”